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What is Amazon FBM?
In our current economic and social climate, it is no wonder that consumers and business owners are turning toward Amazon as a medium to shop and sell at an increasingly rapid pace. Have you signed up for Amazon yet? Click here to create your account. As a seller, it is highly beneficial to you, and your customers, to utilize Amazon FBM (Fulfillment By Merchant) rather than FBA (Fulfillment By Amazon). Check out this article to help you decide between Amazon FBM and Amazon FBA for your company.
Amazon FBM allows sellers to have control over the distribution of their product, either through self-fulfillment or a 3PL (third-party logistics company), without the need to rely on Amazon. For FBM sellers considering an upgrade to the Prime badge, it’s worth understanding the Seller Fulfilled Prime performance requirements and how Amazon was pushed to reopen the program to all sellers.
If you are interested in finding out more about Amazon FBM vs. Amazon FBA, we encourage you to read through our blog on the subject here, or watch our Amazon FBM vs. Amazon FBA YouTube video.
Why Should You Be Using Amazon FBM This Q4?
As a seller in Q4, you are able to use Amazon’s Fulfillment by Merchant (FBM) method of fulfillment and inventory management to help you manage increased order volume and maintain stability through Q4.With FBM, you can avoid potential bottlenecks with Fulfillment by Amazon (FBA) and any unexpected limitations caused by capacity constraints. By utilizing FBM for your business, you will have the ability to operate efficiently and profitably during Q4 and remain competitive within your market.
Here is everything you need to know about Amazon FBM and how it can accelerate your brand.
Whether you choose FBM or FBA this Q4, understanding how to sell on Amazon effectively is essential for maximizing peak season profits.
1. Inventory Restrictions
Due to COVID-19, Amazon has heavily limited the amount of units per business that they are allowing in their warehouses. With Amazon FBM, your product will not be restricted to Amazon warehouses, and instead will be held in your home, or external warehouses- such as AMZ Prep. In choosing Amazon FBA, you will be forced to sell units in restricted quantities, and in the fourth quarter, this can be detrimental to sales. Due to exponential spikes in purchases during the holiday season, utilizing Amazon FBA means that you run the risk of selling out of stock and potentially losing a substantial amount of orders, and in turn, sales. Choosing Amazon FBM with a 3PL eliminates this issue and ensures that your stock is in high supply during influxes in purchases.
2. Don’t Get Affected by Carrier Capacities
When creating an inbound shipment through Amazon Seller Central Canada, you may notice that products are shipped through UPS, this is because Amazon has a partnership with UPS in order to receive discounted rates. The problem with being limited to UPS is that they will hit capacity and begin limiting the amount of units they will move during the flood of purchases in Q4. Deciding to utilize Amazon fulfillment by merchant alongside a third-party logistics company allows you to choose between carriers such as Purolator, Canpar, or Canada Post. Having the option to work with multiple carriers through Amazon FBM allows for a larger number of units to be shipped since you will have the option to spread your product amongst multiple carriers once one reaches capacity and begins limiting the amount of units they will accept. Amazon FBM is beneficial since it eliminates the possibility of extended shipment timelines due to carrier restrictions. thereby maintaining customer satisfaction and increasing sales. If you are interested in learning more about diversifying your carriers, check out our sister company, eShipper.
3. Fulfillment Timelines Control
During influxes in consumerism, such as during the height of the COVID-19 pandemic, Amazon reaches capacity and begins to remove Prime badges, eliminating the boost in sales that accompanies them. This will be the case during this Q4, even more so than during last year’s, as the holiday season rears its head while COVID-19 restrictions begin to lift, permitting families and friends to gather together and exchange gifts. Furthermore, Amazon fulfillments will slow down immensely as they hit capacity during a time in which efficiency is a necessity. Utilizing Amazon FBM accompanied by a 3PL will uphold customer satisfaction as there is no need to inbound shipments to Amazon, where receiving can take multiple weeks, instead, Amazon fulfillment fluctuations are eradicated.
4. Ability to Diversify Your Listings
By using Amazon fulfillment, you are subject to inventory restrictions, which means units are limited to a certain amount per account, restricting the amount of listings that can be shown when searching in Amazon. Making use of Amazon FBM rids sellers of this hindrance since they are in control of their inventory. Amazon FBM, then, provides the opportunity to increase and diversify listings, steering customers to your products and enhancing sales as a result.
5. Larger items = Higher Storage in Q4
During influxes in consumerism, such as during the height of the COVID-19 pandemic, Amazon reaches capacity and begins to remove Prime badges, eliminating the boost in sales that accompanies them. This will be the case during this Q4, even more so than during last year’s, as the holiday season rears its head while COVID-19 restrictions begin to lift, permitting families and friends to gather together and exchange gifts. Furthermore, Amazon fulfillments will slow down immensely as they hit capacity during a time in which efficiency is a necessity. Utilizing Amazon FBM accompanied by a 3PL will uphold customer satisfaction as there is no need to inbound shipments to Amazon, where receiving can take multiple weeks, instead, Amazon fulfillment fluctuations are eradicated.
6. Getting Away from Inbound Charges
LTL (Less Than Truckload) shipment charges going into Amazon during Q4 increase two to three times in price because of surcharges, waiting times at the dock, as well as bounces from Amazon as a result of rejections due to volume, and much more. Read more about turnover rates here. Furthermore, when creating your FBA shipment ID within Amazon Seller Central, appointments are hectic because docks are overloaded. Amazon FBM is wise monetarily during the already strenuous holiday season as sellers will be able to avoid Amazon warehouses altogether by utilizing a 3PL.
7. Advertising doesn’t get shut out/consistent advertising strategy
As you know, the first thing a seller sees when searching on Amazon are sponsored ads. These advertisements are crucial to a large portion of sales particularly during the increased traffic in Q4. However, when utilizing Amazon FBA, Amazon will pause advertising when products are out of stock, hindering a large portion of sales. Since there will be an influx of sales during Q4, it is likely that lack of stock will hurt advertisement visibility immensely. With Amazon FBM, Amazon does not have the ability to limit your stock, therefore your advertisements will remain consistent for the Amazon algorithm, which also increases your chances of boosting your ranking during Q4. Thus, Amazon FBM bumps up sales through stock and advertisement consistency. Is your advertising strategy all set up for Q4? Learn more here.
Blair Forrest is the Founder of AMZ Prep, one of North America’s fastest-growing third-party logistics and fulfillment networks, built entirely without outside capital since 2016. Under his leadership, AMZ Prep has scaled to 50+ fulfillment centers across 6 countries, processing over 8 million units monthly and powering $2 billion+ in annual GMV for more than 5,000 brands worldwide including 437, Silverts, Saltyface, Unilever, Duracell, and JBL. A recognized authority in eCommerce logistics, Amazon FBA strategy, and supply chain optimization, Blair has helped thousands of sellers and brands master their fulfillment operations from first shipment to enterprise scale. He regularly consults on FBA prep, multi-channel fulfillment, last mile delivery, international expansion, and cost reduction strategies that save brands 20–40% compared to traditional 3PL providers. Blair’s insights on Amazon logistics, 3PL operations, and eCommerce growth are widely cited across the industry. Through AMZ Prep’s content, guides, and resources, he continues to share battle-tested strategies drawn from managing one of the largest independently owned fulfillment networks in North America.
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